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Friday, 18 October 2013

Fracking, is it really in our interest?

This is my most recent blog about fracking, the how's and why's laid out for people to see. I hope that it is a balanced appraisal and that it helps those who read it to better inform their opinions. I have published the version from the final edit from another blog, hence a few format changes.

How the Frack?

Recent events in the UK, Europe and the United States have
propelled hydraulic fracturing (‘fracking’) up the public and political agenda.
Amid the hullabaloo
down in Balcombe, you could easily miss the arguments advanced by each side. Is
the anti-fracking camp pitched on solid ground? Is the case for drilling full
of holes? In the first of two articles
on this topic I will examine how fracking works and what the risks are, while
the second will assess how much we need it.

Unconventional oil and gas exploitation uses what are now quite
conventional drilling methods, developed through the long history of the oil
and gas industry. These techniques use what are known as the ‘best available
technologies’, which are well understood from the perspectives of costs, risks and
safety. Well construction and design can and often does enable the safe
extraction of fossil fuels from deep below the ground.

No sense of wellbeing

However, the oil and gas industry does not inspire huge public
confidence, as attention focuses on major incidents like the Deepwater Horizon blowout,
which have cost lives, caused huge environmental damage, and bolstered the
arguments of green campaigners. Concerns about engineering methods and well
integrity are more serious than any number of dubious YouTube clips showing
people setting light to gas from their water taps.

Fracking is often carried out at considerable depth and involves
pumping high pressure water into the rock. Deep wells and high pressures place strain
on the engineered infrastructure and reduce the margins for error. However, at
Balcombe, initial drilling is less
than 1,500 metres. The average depth of a fracked well in the US is around
2,500 metres, while the Bowland
Shale in Lancashire is at a depth of some 4,750 metres. North Sea reserves
are typically 3-5km below the seabed, but all are shallow compared with Deepwater
Horizon, the deepest oil well in the world, extending more than 10,600 metres down
into the rock.

The Royal Society and Royal Academy of Engineers have
produced a
report on shale gas extraction, which highlights the need for good
construction and well integrity. However, sustaining these standards may be
challenging in a relatively new industry here in the UK, especially when there
are calls for deregulation and a need for short term returns on investments.

Water mess

Engineering challenges are not the only risk to account for
in an Environmental Impact Assessment – contamination, water impacts and even
radiation need to be considered. The evidence to quantify them may not yet be
available in all cases, but the absence of evidence is not evidence of absence,
especially in a developing industry.

The fracking process requires a huge amount of water, some 2-5
million gallons per well – although this estimate may be somewhat low due to
the way data is collected and the fact that some wells are fracked multiple
times. An MIT researcher has calculated
total water use for US wells in 2011 to be around 135 billion gallons, based on
a 5 million gallon average. This represents just 0.3% of US water consumption,
rather less than is used by golf courses.

This is a small percentage, but water stress is high on the
US agenda – it may become a focus in the UK, too, judging by most recent stress
maps. Fracking’s additional demands are not trivial: the industry’s impact on
aquifers in some Texan counties is starting to foment concerns amongst
previously pro-fracking populations.

The process of pumping large quantities of high pressure
water, sand and sundry drilling additives produces a lot of waste water, which
also contains toxic material brought up from the shales. Common toxins include
heavy metals (such as barium, strontium and arsenic) along with a number
hydrocarbons and bromides.

Evidence being amassed in the US shows that fracking
operations have polluted groundwater and released fluids and gas into drinking
water aquifers. As early as 1984, the US Environmental Protection Agency (EPA)
reported a case in West Virginia, which rendered an aquifer unusable. In 2011, the
EPA also reported extensive contamination of groundwater in Wyoming, and similar
events have been recorded in Canada. In each case, the causes have been
identified as faulty well installation, with seepage back into the ground from inadequately
engineered waste water storage. There are of course also reports of cases where
no contamination has taken place, which may serve as case studies of good
practice, but the evidence suggests a degree of inherent risk.

Ill treatment

A recent study by the University of Texas at Arlington found
elevated levels of arsenic and other heavy metals in groundwater near fracking
sites in Texas’ Barnett Shale. Whilst the study is not conclusive, elevated arsenic
levels have also been detected by the EPA
in domestic well water near a fracking site at Dimock, PA, necessitating
additional treatment systems to be installed by householders.

In Pennsylvania, state authorities have responded to EPA concerns
by requiring fracking waste water discharges to stop unless properly treated.
Some had been discharged to sewage works
that were incapable of dealing with the pollutants and therefore affecting
river quality. The UK might also struggle to treat substantial amounts of contaminated
wastewater so as to meet discharge standards, and could find itself in breach
of Water Framework Directive obligations.

Some US fracking wastewater is not treated: much is re-used
and then stored, whether temporarily pending treatment, or long-term in deep
wells. Above ground storage in open (and sometimes leaky) lagoons carries the
highest risk of land being contaminated, but underground storage also holds
risks.

Illegal discharges of polluted wastewater and reliance on
storage in the US may be connected with the country’s immense size, and the
distance water must be transported for treatment. In a country on the UK’s scale,
treatment sites will be closer, but some wells will still have significant storage
and transport needs. The lesson from the US appears to be that these will
require strict controls.

Gas radiator?

There are two sources of radionuclides from fracking: those deliberately
injected to trace and profile wells, and those occurring naturally in the shale
that are brought to the surface. Around a dozen short half-life isotopes are used
in controlled quantities for injection. Their use is of less concern than the
naturally occurring radionuclides, such as Radium, Radon, Thorium and Uranium, which
have a longer half-life. These materials require careful management to avoid environmental
and health impacts.

The EPA has detected higher than permitted levels of these
radionuclides in the outfall from wastewater treatment plant, and drilling
industry studies have found that dilution in rivers may not be effective,
meaning that radionuclides could enter drinking water inlets. Workers and local
residents at drilling sites and wastewater treatment plants are exposed to
health risks, most obviously cancers of the internal organs and the lungs, where
Radon escaping as a gas, has the opportunity to evaporate from storage or at
the well head.

Fluid situation

An extensive
range of additives may be injected with the sand and water during the drilling
and extraction processes in varying dilution and mixtures depending upon the
geology of the fracked well. Most are quite widely used in industry, as
operators are keen to point out, although they may have toxic characteristics: ammonium
persulfate, hydrochloric acid and mineral oil being examples.

These additives constitute around 1% of the fluid, a
significant quantity given the large amounts of water and sand being pumped. In
the US the makeup of fracking fluids can remain unknown under commercial
sensitivity laws, but UK rules include better disclosure on what chemicals are
being used, allowing them to be vetted for toxicity and other hazardous
properties.

Shaking shale

Fracking is thought to cause seismic activity, and
operations at the Cuadrilla site in the north west of England were suspended
after a minor earthquake hit
the news last year. A DECC report
co-authored with the British Geological Society concluded that “the risk from
these earthquakes is low” in terms of structural damage, but I would have concerns
about the risk posed to the integrity of the well lining itself.

A recent report in
the journal Science concluded that a large earthquake many miles away may trigger
a swarm of smaller earthquakes around a drilling site. The resulting
destabilisation of the fracked area can later lead to a larger earthquake. Fracking
wells might act like seismic lightning rods; but there’s no safe path to earth
for an earthquake and they could pose a more serious threat to habitations and
structures than previously thought.

None of the issues that I have raised is technically
insurmountable or fatal to the fracking cause if carefully managed, but each
risk needs to be controlled appropriately through regulation. The International
Energy Agency (IEA) has published a set of ‘golden rules’ for
fracking that include examples of best practice in policy and regulation, which
would be a good starting point for the UK. If we are to safely extract gas
instil confidence in the regulatory matrix as whole, regulation will need to be
backed by close monitoring.

These controls will be costly to establish and maintain –
the IEA estimates that implementing its rules would increase the costs of a
well by around
7% – which may harm the business case for unconventional oil and gas.
However, without such measures it is doubtful whether even residents of the desolate north will
be induced to welcome fracking, whatever its economic benefits.

administrator posted: "By Mike
Tregent All else being equal, is fracking something we should welcome?
Advocates of fracking present it as ushering in a new age of cheap energy and
increased self-sufficiency. But is it really going to be economically beneficial
and will"

Why the Frack?

All
else being equal, is fracking something we should welcome? Advocates of fracking
present it as ushering in a new age of cheap energy and increased
self-sufficiency. But is it really going to be economically beneficial and will
it reduce our bills? Is it ethical and sustainable? In a previous article for Isonomia,
I explained the fracking process and examined the risks inherent within it. Now
let’s look at exactly what this means in terms of our energy mix, security of
supply, and why it has been labelled as an extension of the dash for gas.

Fracking
cheap

The
large scale exploitation of shale gas in the US has defined a model that many in
Europe are keen to follow. It has certainly had a profound effect on energy
costs – the International Centre for Climate Governance reported that “in 2010 the average gas spot price at the Henry
Hub in the US was only $4 per Million British Thermal Units (MBtu), while in
2008, the same price was for around $8-9 per MBtu.” Gas prices were also
considerably lower than in other developed countries.

However,
Robin Miege, director of strategy at the European Commission’s DG Environment,
recently poured cold water over prospects for unconventional
hydrocarbons in Europe, pointing to important geographic and geological
differences between the US and Europe. These differences mean that shale gas
production costs could twice as much in the EU as in the US, limiting the scope
for unconventional hydrocarbons to transform our gas market to any comparable
extent. Indeed, even if shale gas were to be cheaper, a senior banker at
Norddeutsche Landesbank has pointed out that it would be unlikely that the benefit would
be felt by customers.

A
significant impact on the gas market would also depend on there being a
substantial amount of gas to exploit. Establishing the true level of reserves is
made more difficult by opposition to the grant of exploratory licences.
Estimates of the reserves in the north west of the UK were recently revised upwards by a factor of twenty, although doubts remain
regarding the proportion of this gas that can economically be extracted.
Extraction challenges mean that the scale of accessible reserves are unlikely to
be as great as current estimates suggest.

The
consensus view on unconventional gas seems to be that it will not arrest but
merely slow the decline in UK conventional gas. It might allow the UK to
negotiate better deals for imported gas by making us less heavily dependent on
them, but this assumes that we continue our over-reliance on gas in our energy
mix. Investing heavily in shale gas and in new gas power stations will divert
resources from diversifying energy production, and simply kick the can down the
road, leaving the next generation to address the real need for
decarbonisation.

Gas
leaks

Shale
gas in Europe would do little to reduce greenhouse gas (GHG) emissions. Natural
gas is a cleaner burning fuel with lower combustion emissions than coal.
However, combustion is only part of story. In 2010 the EPA carried out an
assessment on “fugitive” gas emissions at or around shale gas sites; the report
suggested that losses from such emissions were much higher than for conventional
natural gas.

Based
on this research, Cornell University examined the total lifecycle CO2 equivalent emissions of
fracking compared with surface and deep coal, diesel oil and conventional gas,
over a 20 year and 100 year time frame. Shale gas performed considerably worse
than conventional gas and even somewhat worse than coal or diesel oil production
over 20 years, although the 100 year picture was rather more complex.

Ring of fire: should we allow our love for natural gas to
be fuelled by fracking? Photo by James Riden, via Wikimedia Commons.

Caution
is therefore needed over claims that shale gas is an environmentally sustainable
option. However, the EPA data on which the study is based is not
uncontroversial, and a subsequent study by the Massachusetts Institute of Technology found
fracking’s fugitive emissions to be much lower. In this field, all results seem
to be contested.

If
the Cornell study is to be believed, only in countries such as Poland, which are
heavily dependent on coal-fired power stations and have large reserves of shale
gas, would a new dash for gas have a beneficial effect on GHGs. Given the urgent
need to reduce our overall emissions, the risk that shale gas production could
hinder progress on the installation of new renewable energy sources needs to be
carefully considered.

Gas
bubble?

Whether
it is worth investing in shale gas depends heavily on how long the supply of gas
might last. Independent think tank The Club of Rome recently
produced a report on increasing scarcity of mineral resources, which highlighted
the challenges of moving from the exploitation of higher grade minerals, which
are recovered relatively easily, towards lower grade exploitation. Fracking is
towards the low grade end of the spectrum, which is characterised by the need to
for greater effort and investment, not to mention increased risk, to win an ever
diminishing quantity of resources in harder conditions. Only if energy prices go
up will fracking repay the investment required.

Analysis
of data supplied by the International Energy Agency suggests that the boom in
the production of shale gas in the US may be relatively short lived; in fact
production could already be at its peak. The average life of a well is only 3-5
years, and the number of new wells being sunk is in decline. The dash for shale
gas in the US has lowered the price to a point where not all extraction is
profitable. This may mean that some possible wells are being held back, but it
even if prices rise so as to make these worthwhile investments, it is unlikely
that these will result in production increasing.

The
unconventional gas market seems to be at risk of experiencing a bubble of a
significant scale. Some economists are already suggesting that it could burst in
a relatively short time frame, with serious consequences for economic stability.
Pinning European hopes for lower energy costs and increased energy security to
such an insecure mast seems rather a risk, especially with the US economy
already wedded to unconventional gas.

The
attraction of shale gas as a means of boosting our struggling economy with cheap
energy is understandable, especially given what we’ve seen happen in the US.
However, the evidence suggests that Europe is a different case, and here shale
gas has much less to contribute. If it proves to be a short-lived bubble, there
also appears to be a real risk of wider damage to the economic system, and my
preference would be to see continued investment in renewable alternative energy,
which would be likely to provide more jobs and greater security. There also
doubt regarding the GHG credentials of shale gas, even compared with other
fossil fuels.

Taking
account of all the risks identified and discussed over the course of my two
articles, I don’t think that any of them is individually fatal to the case for
fracking. Most can be managed (at a cost) or mitigated by ensuring we do not
overcommit to unconventional gas. However, taken together they make shale gas
appear distinctly unpromising. If you were to ask me whether I’d back a new dash
for gas, I’d have to say not on your fracking Nelly!